PART A: Newco is owned $100\%$ by Jeff Williams. Jeff$$s tax basis in his Newco shares is $$3,000,000.$

Newco has the following assets and liabilities when it proposes to liquidate.

Asset FMV Tax Basis

Cash $500,000500,000$

Equipmen

t

$850,000-0-$

Inventory $500,000400,000$

Land $900,000400,000$

Building $1,600,0001,150,000$

Goodwill $2,100,000-0-$

Totals $6,450,0002,450,00$